Binyamin Netanyahu has launched a scathing attack on the uprisings in the Middle East, saying that Arab countries are "moving not forward, but backward" and support from the US and European countries was naive.

Speaking to the Israeli parliament amid renewed protests and violence in Egypt, Netanyahu said concessions to the Palestinians were unwise in a period of instability and uncertainty in the region.

"In February, when millions of Egyptians thronged to the streets in Cairo, commentators and quite a few Israeli members of the opposition said that we're facing a new era of liberalism and progress … They said I was trying to scare the public and was on the wrong side of history and don't see where things are heading." But, he told the Knesset, events had proved him correct.

When he cautioned Barack Obama and other western leaders against backing the revolt against Hosni Mubarak's regime, he was told he failed to understand reality. "I ask today, who here didn't understand reality? Who here didn't understand history?"

Those calling for a swift resolution of Israel's conflict with the Palestinians in the context of regional upheavals were misguided, he said. "Israel is facing a period of instability and uncertainty in the region. This is certainly not the time to listen to those who say follow your heart … I remember many of you urged me to seize the opportunity to make hasty concessions, to rush to an agreement.

"We can't know who will end up with any piece of territory we give up. Reality is changing all the time, and if you don't see it, your head is buried in the sand."

The foundations of stability and security were essential for any peace deal with the Palestinians, he said.

Israel has been monitoring renewed confrontations between protestors and security forces in Cairo and other Egyptian cities, and has concerns about the outcome of elections next week.

It fears Islamist parties will be a pivotal bloc in the next parliament, will strengthen ties with Hamas in Gaza and may seek to renegotiate parts of the 1979 peace treaty between Israel and Egypt.

"It's expected that the Muslim Brotherhood and other Islamist parties will dominate the government, and we are concerned that their success will encourage other Islamic radical parties in the Middle East to act more openly to achieve their goals," said Eli Shaked, a former Israeli ambassador to Egypt.

Diplomats have so far failed to persuade Israel and the Palestinians to return to talks. Israel says the Palestinian effort to win recognition of a state at the UN was a "unilateral" move which it rejected.

It refuses to negotiate with a Palestinian unity government which includes Hamas, which is possible should reconciliation talks between the two factions make progress.

The Palestinians say they will not return to talks while Israel continues to build and expand settlements in the West Bank and East Jerusalem.